Towns seek to intervene in LGC's Supreme Court appeal

By GARRY RAYNOState House Bureau

CONCORD - Towns objecting to the way the Local Government Center intends to repay communities for health insurance premiums diverted to other uses are asking to intervene in the organization's appeal to the state Supreme Court.

The LGC is appealing the Bureau of Securities Regulations' order to repay communities $53.4 million in funds that were diverted from its health insurance program.

The LGC's proposed reimbursement through premium "holidays" to current members is opposed by 14 towns that have since taken their insurance business elsewhere and would not receive financial benefit.

The motion to intervene was filed by Durham, Northfield, Peterborough and Salem on behalf of the 14 communities.

They claim the refunds should be in proportion to what communities paid for insurance coverage through LGC programs.

"The (Bureau of Securities Regulations) does not distinguish among members. Some joined the risk pools early or late, some left early or late, and some joined, left, and later rejoined," said Durham Town Administrator Todd Selig. "By ordering the money returned to current members, it created windfalls for some, but inadequate recompense for others. That is, some members will receive an arbitrarily larger share than their contribution, and some an arbitrarily smaller share."

The protesting towns have asked the court to let them intervene to address the issue of refunds proportional to contributions.

"We just received late this afternoon a copy of the press release and the web link to the pleading," said Maura Carroll, LGC executive director. "We are in the process of reviewing these materials and talking about this with legal counsel. We'd be happy to make a comment after we've had a chance to discuss this with our attorneys and our governing boards."

The LCG came under fire for retaining large surpluses from its self-funded risk pools for liability claims and health care coverage for municipalities and other government agencies such as school districts, housing authorities and water districts.

The organization believes the large reserves kept rates stable for members and reduced long-term costs.

Instead, critics said the surplus should have been returned to its members rather that used for other purposes, such as a workers' compensation program.

The hearings officer set a lower threshold for surpluses and ordered the LGC to return money to its customers.